Although the news reports say the economy is recovering, you are probably still living paycheck-to-paycheck with every penny spoken for. While some states allow you to shop around for utility rates – for example, Jayton, Texas residents can do a web search for “Jayton Electricity prices” to find progressively better rates – you might still have trouble making ends meet.
So when it’s time to buy new appliances, furniture, or electronics, it could be tempting to go the Rent-to-Own route.
On the surface, rent-to-own places seem like a good deal. For a few dollars per week, you can treat yourself and your family to the latest products. You can keep them the end of the rental period, and own them outright; or trade them in at any point for bigger, better, and newer models. And credit isn’t an issue, all you need is a steady source of income, and a few personal references.
But as enticing as these programs are, they are ultimately a waste of your hard-earned cash for several reasons:
These stores have the most popular brands and with the latest features, but unlike an appliance store, you don’t have the option to shop around. For example, if you want a laptop, you might have two to four manufacturers to choose from, and only one or two models from each manufacturer. Whereas, at a non-rental store you could have a wider selection of manufacturers and models, in a variety of price ranges and that’s not including any sales or specials. Having more variety lets you find the products that better fit your budget and needs.
The rental stores advertise low prices and affordability, but the truth is that these places tend to charge market rates on their items which make them very expensive. For example, the price of brand-new 17-inch HP laptop at a rental place is about $1,200. A very similar unit would cost you half that much at Amazon, or Best Buy. If the item is previously-rented, you’ll pay about half what you would for new, but that’s as much as you would pay for brand-new somewhere else.
Deceptive Payment Plans:
Walk into a rental store, you’ll see the weekly rates for whatever is on the sales floor. And most of the rates seem perfectly doable — I mean, who can’t scrape together $20/week, right? But, taxes and fees bring the price closer to $30/week, and the rental term can be as long as 35 months. So if you keep that $20/week flat screen for the full length of the contract, you’ll have paid $4,200.
It Distracts You From Saving:
It may not seem like a big deal to scrape together $30 every week, but that’s $120/month. After four months, you would have paid $480 toward that item, and still have 31 months to go on your contract. And if you cancel your contract, you’re out $480 and the item. Every month that you pay a rental item, you could be saving and, use that money to get better deals at other retailers.
Unless it’s an emergency emergency situation, like your refrigerator is broken and the only way to replace it is to rent, your best bet is to avoid rent-to-own places.
These vendors prey on the impulse for immediate gratification; don’t take the bait. Instead, take the money that you would have spent on the weekly rental and put it into a savings account. Then, when you have saved enough, use that money to shop around for the best deal.